[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2452 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 2452
To amend the Internal Revenue Code of 1986 to provide matching payments
for retirement savings contributions by certain individuals, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 22, 2021
Mr. Wyden (for himself, Mr. Bennet, Mr. Casey, Mr. Durbin, Ms.
Klobuchar, Mr. Menendez, and Mrs. Murray) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide matching payments
for retirement savings contributions by certain individuals, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Encouraging Americans to Save Act''.
SEC. 2. SAVER'S MATCHING CREDIT FOR ELECTIVE DEFERRAL AND IRA
CONTRIBUTIONS BY CERTAIN INDIVIDUALS.
(a) In General.--Subchapter B of chapter 65 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 6433. SAVER'S MATCHING CREDIT FOR ELECTIVE DEFERRAL AND IRA
CONTRIBUTIONS BY CERTAIN INDIVIDUALS.
``(a) In General.--
``(1) Allowance of credit.--Any eligible individual who
makes qualified retirement savings contributions for the
taxable year shall be allowed a credit for such taxable year in
an amount equal to the applicable percentage of so much of the
qualified retirement savings contributions made by such
eligible individual for the taxable year as does not exceed
$2,000.
``(2) Payment of credit.--The credit under this section
shall be paid by the Secretary as a contribution (as soon as
practicable after the eligible individual has filed a tax
return for the taxable year) to the applicable retirement
savings vehicle of an eligible individual.
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the
applicable percentage is 50 percent.
``(2) Phaseout.--The percentage under paragraph (1) shall
be reduced (but not below zero) by the number of percentage
points which bears the same ratio to 50 percentage points as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted
gross income for such taxable year, over
``(ii) the applicable dollar amount, bears
to
``(B) the phaseout range.
If any reduction determined under this paragraph is not a whole
percentage point, such reduction shall be rounded to the next
lowest whole percentage point.
``(3) Applicable dollar amount; phaseout range.--
``(A) Joint returns.--Except as provided in
subparagraph (B)--
``(i) the applicable dollar amount is
$65,000, and
``(ii) the phaseout range is $20,000.
``(B) Other returns.--In the case of--
``(i) a head of a household (as defined in
section 2(b)), the applicable dollar amount and
the phaseout range shall be \3/4\ of the
amounts applicable under subparagraph (A) (as
adjusted under subsection (g)), and
``(ii) any taxpayer who is not filing a
joint return and who is not a head of a
household (as so defined), the applicable
dollar amount and the phaseout range shall be
\1/2\ of the amounts applicable under
subparagraph (A) (as so adjusted).
``(4) Exception; minimum credit.--In the case of an
eligible individual with respect to whom (without regard to
this paragraph) the credit determined under subsection (a)(1)
is greater than zero but less than $100, the credit allowed
under this section shall be $100.
``(c) Eligible Individual.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the
term `eligible individual' means any individual if such
individual has attained the age of 18 as of the close of the
taxable year.
``(2) Dependents not eligible.--The term `eligible
individual' shall not include any individual with respect to
whom a deduction under section 151 is allowed to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(d) Qualified Retirement Savings Contributions.--For purposes of
this section--
``(1) In general.--The term `qualified retirement savings
contributions' means, with respect to any taxable year, the sum
of--
``(A) the amount of the qualified retirement
contributions (as defined in section 219(e)) made by
the eligible individual,
``(B) the amount of--
``(i) any elective deferrals (as defined in
section 402(g)(3)) of such individual, and
``(ii) any elective deferral of
compensation by such individual under an
eligible deferred compensation plan (as defined
in section 457(b)) of an eligible employer
described in section 457(e)(1)(A),
``(C) the amount of voluntary employee
contributions by such individual to any qualified
retirement plan (as defined in section 4974(c)), and
``(D) the amount of contributions by such
individual to a qualified ABLE program (as defined in
section 529A(b)) for the benefit of the individual.
Such term shall not include any amount attributable to a
payment under subsection (a).
``(2) Reduction for certain distributions.--
``(A) In general.--The qualified retirement savings
contributions determined under paragraph (1) for a
taxable year shall be reduced (but not below zero) by
the aggregate distributions received by the individual
during the testing period from any entity of a type to
which contributions under paragraph (1) may be made.
``(B) Testing period.--For purposes of subparagraph
(A), the testing period, with respect to a taxable
year, is the period which includes--
``(i) such taxable year,
``(ii) the 2 preceding taxable years, and
``(iii) the period beginning on the day
after the last day of such taxable year and
ending with the due date (including extensions)
for filing the return of tax for such taxable
year.
``(C) Excepted distributions.--There shall not be
taken into account under subparagraph (A)--
``(i) any distribution referred to in
section 72(p), 401(k)(8), 401(m)(6), 402(g)(2),
404(k), or 408(d)(4),
``(ii) any distribution to which section
408(d)(3) or 408A(d)(3) applies,
``(iii) any distribution to which the rules
described in the second sentence of section
529A(b)(2) apply, and
``(iv) any portion of a distribution if
such portion is transferred or paid in a
rollover contribution (as defined in section
402(c), 403(a)(4), 403(b)(8), 408A(e), or
457(e)(16)) to an account or plan to which
qualified retirement savings contributions can
be made.
``(D) Treatment of distributions received by spouse
of individual.--For purposes of determining
distributions received by an individual under
subparagraph (A) for any taxable year, any distribution
received by the spouse of such individual shall be
treated as received by such individual if such
individual and spouse file a joint return for such
taxable year and for the taxable year during which the
spouse receives the distribution.
``(e) Applicable Retirement Savings Vehicle.--
``(1) In general.--The term `applicable retirement savings
vehicle' means--
``(A) an account or plan elected by the eligible
individual under paragraph (2),
``(B) in the case of qualified retirement savings
contributions described in subsection (d)(1)(D), the
qualified ABLE program (as defined in section 529A(b))
to which such contributions were made, or
``(C) if no such election is made or the Secretary
is not able to make a contribution into such account or
plan, an account established for the benefit of the
eligible individual under the R-Bond Program.
For purposes of subparagraph (C), if no account has previously
been established for the benefit of the individual under the R-
Bond Program, the Secretary shall establish such an account for
such individual for purposes of receiving contributions under
this section.
``(2) Other retirement vehicles.--An eligible individual
may elect, in such form and manner as the Secretary may
provide, to have the amount of the credit determined under
subsection (a) contributed to an account or plan which--
``(A) is a Roth IRA or a designated Roth account
(within the meaning of section 402A) of an applicable
retirement plan (as defined in section 402A(e)(1)),
``(B) is for the benefit of the eligible
individual, and
``(C) accepts contributions made under this
section.
In the case of a plan of which a qualified trust under section
401(a) is a part, an annuity contract described in section
403(b), or a plan described in section 457(b) which is
established and maintained by an employer described in section
457(e)(1)(A), the plan shall have discretion whether to accept
contributions made under this section, but if the plan accepts
any such contributions it shall accept them on a uniform basis.
``(f) Other Definitions and Special Rules.--
``(1) Modified adjusted gross income.--For purposes of this
section, the term `modified adjusted gross income' means
adjusted gross income--
``(A) determined without regard to sections 911,
931, and 933, and
``(B) determined without regard to any exclusion or
deduction allowed for any qualified retirement savings
contribution made during the taxable year.
``(2) Treatment of contributions.--In the case of any
contribution under subsection (a)(2)--
``(A) except as otherwise provided in this section
or by the Secretary under regulations, such
contribution shall be treated as--
``(i) an elective deferral made by the
individual which is a designated Roth
contribution, if contributed to an applicable
retirement plan, or
``(ii) a Roth IRA contribution made by such
individual, if contributed to a Roth IRA,
``(B) such contribution shall not be treated as
income to the taxpayer, and
``(C) such contribution shall not be taken into
account with respect to any applicable limitation under
sections 402(g)(1), 403(b), 408(a)(1), 408(b)(2)(B),
408A(c)(2), 414(v)(2), 415(c), or 457(b)(2), and shall
be disregarded for purposes of sections 401(a)(4),
401(k)(3), 401(k)(11)(B)(i)(III), 410(b), and 416.
``(3) Treatment of qualified plans, etc.--A plan or
arrangement to which a contribution is made under this section
shall not be treated as violating any requirement under section
401, 403, 408, or 457 solely by reason of accepting such
contribution.
``(4) Erroneous credits.--If any contribution is
erroneously paid under subsection (a)(2), the amount of such
erroneous payment shall be treated as an underpayment of tax.
``(g) Inflation Adjustments.--
``(1) In general.--In the case of any taxable year
beginning in a calendar year after 2023, each of the dollar
amounts in subsections (a)(1) and (b)(3)(A)(i) shall be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2022' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--Any increase determined under paragraph
(1) shall be rounded to the nearest multiple of--
``(A) $100 in the case of an adjustment of the
amount in subsection (a)(1), and
``(B) $1,000 in the case of an adjustment of the
amount in subsection (b)(3)(A)(i).''.
(b) Payment Authority.--Section 1324(b)(2) of title 31, United
States Code, is amended by striking ``or 6431'' and inserting ``6431,
or 6433''.
(c) Deficiencies.--Section 6211(b)(4) is amended by striking ``and
6431'' and inserting ``6431, and 6433''.
(d) Reporting.--The Secretary of Labor, the Secretary of the
Treasury, and the Director of the Pension Benefit Guaranty Corporation
shall--
(1) amend Form 5500 to require separate reporting of the
aggregate amount of contributions received by the plan during
the year under section 6433(a)(2) of the Internal Revenue Code
of 1986 (as added by this section), and
(2) amend Form 5498 to require similar reporting with
respect to individual retirement plans (as defined in section
7701(a)(37) of such Code).
(e) Conforming Amendments.--
(1) Section 25B of the Internal Revenue Code of 1986 is
amended by striking subsections (a) through (f) and inserting
the following:
``For payment of credit related to qualified retirement savings
contributions, see section 6433.''.
(2) The table of sections for subchapter B of chapter 65 of
such Code is amended by adding at the end the following new
item:
``Sec. 6433. Saver's matching credit for elective deferral and IRA
contributions by certain individuals.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2022.
(g) Coronavirus Recovery Bonus Credit.--
(1) In general.--In the case of taxable years beginning
after December 31, 2022, and before January 1, 2028, the amount
of the credit determined under section 6433 of the Internal
Revenue Code of 1986, as added by this section, shall be
increased by an amount equal to 50 percent of so much of the
qualified retirement savings contributions made by an eligible
individual for the taxable year as does not exceed--
(A) $10,000, reduced by
(B) the aggregate amount of qualified retirement
savings contributions made by the eligible individual
in all preceding taxable years which begin after
December 31, 2022.
(2) Phaseout.--The $10,000 amount under paragraph (1)(A)
shall be reduced (but not below zero) by a percentage which
bears the same ratio to 50 percent as--
(A) the excess of--
(i) the taxpayer's modified adjusted gross
income for the taxable year, over
(ii) the applicable dollar amount, bears to
(B) the phaseout range.
If any reduction determined under this paragraph is not a whole
percentage point, such reduction shall be rounded to the next
lowest whole percentage point.
(3) Definitions.--For purposes of this subsection, the
terms ``qualified retirement savings contributions'',
``eligible individual'', ``applicable dollar amount'', and
``phaseout range'' have the meanings given such terms by
subsections (d), (c), and (b), respectively, of section 6433 of
such Code, as so added.
SEC. 3. ESTABLISHMENT OF R-BOND PROGRAM.
(a) In General.--The Secretary of the Treasury shall, not later
than January 31, 2023, establish a permanent program, to be known as
the ``R-Bond Program'', which meets the requirements of this section to
establish and maintain individual retirement plans on behalf of
individuals.
(b) Program Specifications.--
(1) In general.--
(A) IRAs.--The R-Bond Program established under
this section shall--
(i) permit the establishment of individual
retirement plans on behalf of an individual,
whether a traditional IRA or a Roth IRA or
both, as appropriate;
(ii) require the assets of each individual
retirement plan established under the program
to be held by the designated IRA trustee;
(iii) permit contributions to be made
periodically to such individual retirement
plans, including contributions paid under
section 6433(a)(2) of the Internal Revenue Code
of 1986, contributions made by direct deposit
or other electronic means, including taxpayer-
directed direct deposit of Federal income tax
refunds by the Department of the Treasury, and
by methods that provide access for the
unbanked;
(iv) permit distributions and rollovers
from such individual retirement plans upon
request of the account owner;
(v) include procedures to consolidate
multiple accounts established for the same
individual in order that each individual, to
the extent practicable, has only one Roth IRA
and only one traditional IRA under the program;
and
(vi) ensure that such individual retirement
plans are invested solely in retirement savings
bonds issued by the Department of the Treasury
for the purpose of the R-Bond Program.
(B) Regulations, etc.--The Secretary of the
Treasury shall have authority to promulgate such
regulations, rules, and other guidance as are necessary
to implement the R-Bond Program, and are consistent
with this section, as well as coordination rules
permitting individual retirement plans to be
established under the R-Bond Program by taxpayer
election on the return of tax, and in connection with
and in support of programs established under State and
local laws that enroll residents in individual
retirement plans.
(2) No fees.--No fees shall be assessed on participants in
the R-Bond Program.
(3) Limitations.--
(A) Contribution minimum.--The Secretary of the
Treasury may establish minimum amounts for initial and
additional contributions to an individual retirement
plan under the R-Bond Program, not to exceed $5.
(B) Limitation of rollover contributions and
transfers.--No rollover contribution or transfer shall
be accepted to an individual retirement plan under the
R-Bond Program except to the extent necessary to
consolidate accounts as provided in paragraph (1)(v).
(4) Designated ira trustee.--For purposes of this section,
the designated IRA trustee is the Department of the Treasury or
such other person as the Secretary of the Treasury may
designate to act as trustee of the individual retirement plans
established under the R-Bond Program.
(5) Disclosures.--The designated IRA trustee shall provide
in writing, in paper form mailed to the last known address of
the individual unless the individual affirmatively elects to
receive electronic statements--
(A) annual account balance statements to
individuals on behalf of whom individual retirement
plans are established under the R-Bond Program, which
shall include--
(i) an explanation that--
(I) program account balances are
solely invested in retirement savings
bonds issued by the Department of the
Treasury for the purpose of the R-Bond
Program;
(II) diversified investment
opportunities which are not guaranteed
by the Federal government are available
for individual retirement plans
established by other providers;
(III) no fees are charged under the
R-Bond Program; and
(IV) the individual has the right
to roll over or transfer an account
balance without penalty;
(ii) an illustration of the potential
impacts that higher yields may have on long-
term accumulation; and
(iii) information on the types of fees that
other providers may charge for the
establishment of individual retirement plans,
and the impact of fees on long-term
accumulation; and
(B) if the account balance of the individual
retirement plan exceeds $15,000 and the individual has
not previously so affirmed, a request that the
individual affirm (including instructions for making
such affirmation) to the designated IRA trustee that
the individual does not want to roll over such account
balance to another plan (according to the rules
relating to rollovers and transfers of individual
retirement plans under the Internal Revenue Code of
1986).
(c) Retirement Savings Bonds.--For purposes of this section--
(1) In general.--The term ``retirement savings bond'' means
an interest-bearing electronic United States savings bond
issued to the designated IRA trustee which is available only to
participants in the R-Bond Program.
(2) Interest rate.--Bonds issued under the R-Bond Program
shall earn interest at a rate equal to the greater of
(determined on the issue date of the bond)--
(A) the rate earned by the Government Securities
Investment Fund established under section 8438(b)(1) of
title 5, United States Code, or
(B) the rate earned by a Series I United States
savings bond.
(3) Reissue in case of change in trustee.--If a successor
designated IRA trustee is designated under subsection (b)(4),
the retirement savings bonds issued to the predecessor
designated IRA trustee shall be reissued to such successor.
(d) Definitions.--For purposes of this section--
(1) Individual retirement plan.--The term ``individual
retirement plan'' has the meaning given such term by section
7701(a)(37) of the Internal Revenue Code of 1986.
(2) Traditional ira.--The term ``traditional IRA'' means an
individual retirement plan which is not a Roth IRA.
(3) Roth ira.--The term ``Roth IRA'' has the meaning given
such term by section 408A(b) of such Code.
(4) Secretary.--Any reference to the Secretary of the
Treasury includes a reference to such Secretary's delegate.
SEC. 4. PROMOTION AND GUIDANCE.
(a) Promotion.--The Secretary of the Treasury (or the Secretary's
delegate) shall educate taxpayers on the benefits provided under
section 6433 of the Internal Revenue Code of 1986 and the R-Bond
Program established under section 3 of this Act.
(b) Notice.--Not later than 1 year after the date of the enactment
of this Act--
(1) Plan administrators.--The Secretary of the Treasury (or
the Secretary's delegate) and the Secretary of Labor, as
appropriate, shall issue guidance to plan administrators
regarding information on the benefits provided under section
6433 of the Internal Revenue Code of 1986 and the R-Bond
Program established under section 3 of this Act for
participants and beneficiaries which is to be required to be
included in plan disclosures including summary plan
descriptions, open enrollment materials, and annual notices
otherwise provided by plans. Such guidance--
(A) shall include model notice language in both
English and Spanish that is deemed to satisfy the
notice requirement of the preceding sentence, and
(B) in the case of annual enrollment materials for
a plan, shall specify that such notice may be given at
the same time as any elective deferral or matching
contribution safe harbor notice would be required to be
given (even if the plan does not incorporate such a
safe harbor) and may be incorporated into such safe
harbor notice.
(2) Trustees and issuers of iras.--The Secretary of the
Treasury (or the Secretary's delegate) and the Secretary of
Labor, as appropriate, shall issue guidance to trustees and
issuers of individual retirement plans regarding information on
the benefits provided under section 6433 of the Internal
Revenue Code of 1986 and the R-Bond Program established under
section 3 of this Act for potentially eligible individuals
which is to be required to be included in individual retirement
plan disclosures.
(3) Payment of credits.--Not later than 3 years after the
date of the enactment of this Act, the Secretary of the
Treasury (or the Secretary's delegate) shall promulgate
guidance setting forth procedures that permit the direct
payment of credits under section 6433 to an employer-sponsored
plan in which the taxpayer is a participant and that elects to
receive such credits, including rules regarding notice to
taxpayers and a plan of a payment of such credit and notice
from a plan to a taxpayer and the Secretary confirming receipt
of a payment.
SEC. 5. DEADLINE TO FUND IRA WITH TAX REFUND.
(a) In General.--Paragraph (3) of section 219(f) of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``is made not later than'' and inserting
``is made--
``(i) not later than'',
(2) by striking the period at the end and inserting ``,
or'', and
(3) by adding at the end the following new clause:
``(ii) by direct deposit by the Secretary
pursuant to an election on the return for such
taxable year to contribute all or a portion of
any amount owed to the taxpayer to an
individual retirement plan of the taxpayer, but
only if the return is filed not later than the
date described in clause (i).''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2021.
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